SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
| S | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE | |
| SECURITIES EXCHANGE ACT OF 1934 |
For the Fiscal Year Ended December 31, 2013
OR
| £ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE | |
| SECURITIES EXCHANGE ACT OF 1934 |
For the Transition Period from __________ to ____________
Commission File No. 001-15185
FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN
(Full Title of Plan)
FIRST HORIZON NATIONAL CORPORATION
(Issuer of Securities Held Pursuant to Plan)
165 MADISON AVENUE
MEMPHIS, TENNESSEE 38103
(Address of Principal Executive Office of Issuer and of Plan)
first horizon national corporation
savings plan
Financial Statements and Supplemental Schedule
December 31, 2013 and 2012
(With Report of Independent Registered Public Accounting Firm Thereon)
first horizon national corporation savings Plan
Index to Financial Statements and Supplemental Schedule
| Note: | All other schedules required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because there is nothing to report. |
Report of Independent Registered Public Accounting Firm
To the Pension, Savings and Flexible Compensation Committee
First Horizon National Corporation Savings Plan
Memphis, Tennessee
We have audited the accompanying statements of net assets available for benefits of the First Horizon National Corporation Savings Plan (the "Plan") as of December 31, 2013 and 2012, and the related statement of changes in net assets available for benefits for the year ended December 31, 2013. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the auditing standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2013 and 2012, and the changes in net assets available for benefits for the year ended December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule, Schedule H, Line 4i - Schedule of Assets (Held at End of Year), as of December 31, 2013, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole.
/s/ Mayer Hoffman McCann P.C.
Memphis, Tennessee
June 25, 2014
| 1 |
FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2013 and 2012
| 2013 | 2012 | |||||||
| Assets: | ||||||||
| Investments - at fair value: (Notes 2, 8 and 10) | ||||||||
| First Horizon National Corporation, common stock fund | $ | 113,183,745 | $ | 103,828,076 | ||||
| Mutual funds | 154,774,221 | 131,087,908 | ||||||
| Money market funds | 22,370,025 | 22,833,229 | ||||||
| Stable value fund (common/collective trust) | 25,724,261 | 25,761,922 | ||||||
| Common/collective trust funds | 95,169,707 | 71,057,718 | ||||||
| Segregated participant investments | 1,376,931 | 1,242,010 | ||||||
| Self-directed brokerage account | ||||||||
| Short-term investments | 1,802,658 | 1,410,852 | ||||||
| Common stock | 2,866,490 | 2,198,566 | ||||||
| Mutual funds | 2,777,047 | 2,142,866 | ||||||
| Partnerships | 82,511 | 159,829 | ||||||
| Total self directed brokerage window | 7,528,706 | 5,912,113 | ||||||
| Total investments - at fair value | 420,127,596 | 361,722,976 | ||||||
| Cash - brokerage window | 16,160 | 179,416 | ||||||
| Receivables: | ||||||||
| Employer contributions | 320,435 | 1,912,739 | ||||||
| Notes receivable from participants | 8,091,371 | 7,672,867 | ||||||
| Due from broker | 105,287 | 123,337 | ||||||
| Due from broker - brokerage window adjustments | 344,236 | 44,952 | ||||||
| Interest and dividends - brokerage window | 4,021 | 5,364 | ||||||
| Total receivables | 8,865,350 | 9,759,259 | ||||||
| Total assets | 429,009,106 | 371,661,651 | ||||||
| Liabilities: | ||||||||
| Expense accrual | 219,347 | 452,225 | ||||||
| Due to broker | — | 772,651 | ||||||
| Due to broker - brokerage window | 77,717 | 220,739 | ||||||
| Total liabilities | 297,064 | 1,445,615 | ||||||
| Net assets reflecting investments at fair value | 428,712,042 | 370,216,036 | ||||||
| Adjustment to contract value from fair value for interest in common/collective trust relating to fully benefit-responsive investment contracts | (328,006 | ) | (1,035,704 | ) | ||||
| Net Assets Available for Benefits | $ | 428,384,036 | $ | 369,180,332 | ||||
See accompanying notes to financial statements.
| 2 |
FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN
Statement of Changes in Net Assets Available for Benefits
Year ended December 31, 2013
| 2013 | ||||
| Additions: | ||||
| Additions to net assets attributed to: | ||||
| Investment income: | ||||
| Net appreciation in investments (See note 8) | $ | 60,274,086 | ||
| Interest and dividend income | 9,897,777 | |||
| Total investment income | 70,171,863 | |||
| Interest income on notes receivable from participants | 252,789 | |||
| Other income relating to special settlement | 3,942,025 | |||
| Contributions: | ||||
| Participants | 17,573,933 | |||
| Employer | 12,910,356 | |||
| Rollovers | 653,627 | |||
| Total contributions | 31,137,916 | |||
| Total additions | 105,504,593 | |||
| Deductions: | ||||
| Deductions from net assets attributed to: | ||||
| Benefits paid to participants or beneficiaries | 45,414,336 | |||
| Administrative expenses | 886,553 | |||
| Total deductions | 46,300,889 | |||
| Net increase | 59,203,704 | |||
| Net assets available for benefits: | ||||
| Beginning of year | 369,180,332 | |||
| End of year | $ | 428,384,036 | ||
See accompanying notes to financial statements.
| 3 |
First horizon National corporation savings plan
December 31, 2013 and 2012
| (1) | Plan Description |
The following description of First Horizon National Corporation Savings Plan (the Plan) provides only general information. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.
The Plan is a defined contribution retirement savings plan established April 23, 1978, for qualified employees of First Horizon National Corporation and certain affiliates (the Company or Plan Sponsor) to provide a savings plan for those employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA). Since inception, the Plan agreement has been amended periodically to conform with provisions of ERISA and other laws and regulations. The Plan is administered by the Pension, Savings and Flexible Compensation Committee of the Company. Wilmington Trust serves as trustee of the Plan. Pursuant to the Plan document, certain retirees are allowed to segregate and direct their accounts into investments outside the investment options available to active participants and defer payment of benefits. These segregated accounts are presented in a single line item in the financial statements and are trusteed by First Tennessee Bank National Association (FTBNA), the Company’s primary affiliate. Aon Hewitt is the recordkeeper of the Plan.
Effective October 1, 2012, the plan replaced the Royce Premier Fund (RYPRX) with Royce Premier Fund Institutional Class Shares (RPFIX). Any funds remaining in the fund being eliminated were mapped to the replacement fund.
| (a) | Contributions |
Under the terms of the Plan, full-time employees are eligible to participate in the Plan immediately. Part-time employees are eligible to participate upon completion of twelve months of service in which they have worked 1,000 hours or more. A participant may authorize payroll deductions from 1% to 60% of eligible pay (subject to certain legal limitations) as contributions, to be invested as authorized by the participant. The Plan allows participants to make Pre-tax and Roth contributions (from 1% to 50% of eligible pay) and other after-tax contributions (from 1% to 10% of eligible pay). Participants may also rollover amounts representing distributions from other defined benefit and/or defined contribution plans. Participants direct their contributions into various investment options offered by the Plan and may elect to change their investment authorizations at any time.
Effective January 1, 2011, the Plan provided a 1% automatic enrollment feature.
The Company makes three types of contributions on behalf of participants to the Plan.
Company matching contributions - After one year of service all participants are eligible for matching contributions. Effective January 1, 2013, all participants receive 100% matching of the first 1% to 6% of participant pre-tax, catch-up, and Roth 401(k) contributions. These contributions will be invested according to a participant’s current investment elections. Prior to 2013, matching contributions were received for 50% of the first 1% to 6% of eligible participant contributions and were invested in the First Horizon National Corporation Stock Fund (ESOP) but could be redirected into the other investment options within the plan. Effective January 1, 2013, these contributions are subject to a three-year vesting schedule for new hires. For all other savings plan participants, these contributions are 100% vested at all times.
| 4 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (1) | Plan Description (continued) |
Company savings contributions – The Company provides Flexible Dollars to employees to spend on benefits or to deposit into the Plan. Participants’ Flexible Dollars deposited into the Plan are identified as Company savings contributions and are not eligible for matching contributions. These contributions are 100% vested at all times.
The Company may also make Employer Non Elective Contributions (ENEC) for employees who are not participants in the First Horizon Pension Plan. ENEC contributions, which are based upon Company performance from the previous year, are determined annually as a percentage of an eligible participant’s eligible earnings. These contributions are subject to a two-year vesting schedule at which point they become 100% vested.
Effective January 1, 2013, upon the freeze of the Company’s qualified pension plan, all employees not participating in a regular bonus program provided by the Company are eligible to participate in the ENEC program, assuming contributions are made.
| (b) | Payment of Benefits |
On termination of service due to death, disability, retirement or termination of service for other reasons, a participant or beneficiary may elect to receive a lump-sum amount equal to the value of the participant’s vested interest in their account, or a direct rollover into an eligible retirement plan, as defined. Qualified retirees are also given the option of partial distributions. The Plan also provides for in-service and hardship withdrawals. A participant may request a withdrawal of all or part of their after-tax, rollover and vested ENEC contributions at any time. Upon obtaining the age of 59 ½, a participant may request a withdrawal of all or a portion of the value of their vested account. Hardship withdrawals are allowed at any time for certain financial needs, as defined. Account balances invested in the ESOP may be received in the form of shares of Company common stock.
| (c) | Participant Accounts |
Each participant’s account is credited with the participant’s contributions, the Company’s contributions and Plan earnings or losses, and is charged with an allocation of asset management fees and certain other recordkeeping expenses. Allocations are based upon participant contributions or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account balance.
| 5 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (1) | Plan Description (continued) |
| (d) | Vesting |
Participants are vested immediately in their personal contributions, plus actual earnings thereon. Effective January 1, 2013, company matching contributions are subject to a three-year vesting schedule for new hires. For all other savings plan participants, these contributions are 100% vested at all times. Vesting in the ENEC portion of a participant’s account is based on years of continuous service. ENEC contributions are subject to a two year vesting schedule at which point the contributions become 100% vested.
| (e) | Forfeited accounts |
At December 31, 2013 forfeited nonvested accounts totaled $78,885. Forfeited amounts may be reallocated to eligible participants based upon eligible compensation as defined by the plan agreement, used to offset employer contributions, be applied to restore participant’s non-vested account upon timely exercise of a buy-back right, or be applied towards expenses of administration of the plan or its related trust.
| (f) | Participant Notes Receivable |
Active employee participants may borrow from their accounts a minimum of $1,000 up to the lesser of $50,000 or 50% of their vested account balance. General purpose loan terms range from 6 to 60 months and primary residence loan terms range from 6 to 120 months. The loans are secured by the balance in the participant’s account. Interest rates are set quarterly based on the interest rate on the 15th day of the month preceding the new quarter and is based on the prime rate as published in the Wall Street Journal. At December 31, 2013 interest rates ranged from 3.25% to 8.25%. Principal and interest is paid ratably through payroll deductions. Prior to April 1, 2009 participants could have up to 3 loans outstanding at one time. After April 1, 2009 up to two loans may be outstanding at one time, but participants can have only one general purpose loan and one primary residence loan per calendar year. Participants who rolled over three outstanding loans prior to April 1, 2009 will be allowed to keep the outstanding loans.
| (2) | Summary of Significant Accounting Policies |
| (a) | Basis of Accounting |
The financial statements of the Plan are prepared under the accrual method of accounting, with the exception of benefit payments which are recorded when paid.
As described in Accounting Standard Codification 962 (“ASC 962”), formerly known as Financial Accounting Standards Board (FASB) Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health and Welfare and Pension Plans (the FSP), investments in fully benefit-responsive investment contracts are required to be presented at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the Plan. The Plan invests in fully benefit responsive contracts in the stable value fund. As required by ASC 962, the accompanying Statements of Net Assets Available for Benefits present the fair value of the investments in the stable value fund as well as the adjustment to contract value relating to the investment contracts. The accompanying Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.
| 6 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (2) | Summary of Significant Accounting Policies (continued) |
| (b) | Use of Estimates |
The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
| (c) | Investment Valuation and Income Recognition |
Investments in mutual funds are recorded at fair value based on the funds’ reported closing net asset values as of the last business day of the year. The mutual funds held by the plan are deemed to be actively traded. Investments in money market funds are stated at fair value based on the closing net asset value of shares held by the Plan at year end. The investment in the stable value fund is stated at contract value as determined by the issuer based on the cost of the underlying investments in guaranteed investment contracts plus accrued interest income less amounts withdrawn to pay benefits. The fair value of the stable value fund is based on discounting the related cash flows of the underlying guaranteed investment contracts based on current yields of similar instruments with comparable durations. The investments in other common/collective trust funds are valued at the closing net asset values determined by the trustees of such funds based upon the fair value of the underlying securities held by a fund less its liabilities. Investments in common stocks are valued at the last reported sales price on the active market on which the individual securities are traded on the last business day of the year. U.S. government agency securities are valued at the mean of the bid and ask prices on the last business day of the year. Investments held in the self-directed brokerage account constitute of a broad array of stocks, mutual funds, money market funds, and partnerships/joint venture interests. Fair values of these investments are determined based on evaluated prices using observable, market-based inputs such as data from Interactive Data. There were no changes in the valuation methodologies used at December 31, 2013 and 2012.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or future fair values. Furthermore, although plan management believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
| 7 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (2) | Summary of Significant Accounting Policies (continued) |
Investment transactions are recorded on a trade-date basis. Interest income is recorded on the accrual basis and is recognized when earned. Dividend income is accrued on the ex-dividend date. Realized gains and losses from investment transactions are reported on the average cost method. Investment income includes unrealized appreciation and depreciation of investments.
Pursuant to the Plan document, certain retirees are allowed to segregate and direct the investment of their accounts and defer payment of benefits. These investments are individually valued according to the accounts and are presented in a single line item in the financial statements.
The Plan also provides to plan participants a self-directed brokerage account option, in which participants may invest in a broad array of stocks, mutual funds, money market funds, and partnership/joint venture interests.
| (d) | Contributions |
Participant and Employer contributions are recognized when earned. Rollovers are recognized when approved by the Plan Sponsor.
| (e) | Benefit Payments |
Benefits paid to participants or beneficiaries are recognized when paid.
| (f) | Administrative Expenses |
Administrative expenses are recognized when incurred.
| (g) | Participant Notes Receivable |
Notes receivable from participants are measured at their unpaid principal balances plus any accrued but unpaid interest. Delinquent participant loans are reclassified as distributions based upon the terms of the plan agreement.
| (h) | Recent Accounting Pronouncements |
In December 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (“ASU”) 2011-11, “Disclosures about Offsetting Assets and Liabilities”. This ASU establishes new disclosure requirements regarding the effect or potential effect of offsetting arrangements on a company’s financial position. It is the result of a joint project with the IASB designed to enhance and provide converged disclosures about financial and derivative instruments that are either offset on the balance sheet, or are subject to an enforceable master netting arrangement (or other similar arrangement). The ASU is effective for fiscal years, and interim periods beginning on or after January 1, 2013. Retrospective application of the disclosures is required for all periods presented within the financial statements.
| 8 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (2) | Summary of Significant Accounting Policies (continued) |
In January 2013, the FASB issued ASU 2013-01, “Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities”. The ASU limits the scope of the new balance sheet offsetting disclosures to derivatives, repurchase agreements, and securities lending transactions to the extent that they are (1) offset in the financial statements or (2) subject to an enforceable master netting arrangement or similar agreement. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods.
The adoption of this guidance had no effect on the Plan’s financial statements.
| (3) | Risks and Uncertainties |
Investment securities, including First Horizon National Corporation common stock, are exposed to various risks, such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in their fair values could occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.
| (4) | Concentration of participant investments |
The Plan has a significant portion of its assets invested in First Horizon National Corporation common stock. This investment in First Horizon National Corporation common stock approximates 26% of the Plan’s net assets available for benefits as of December 31, 2013.
| (5) | Plan Termination |
Although it has not expressed any intent to do so, the Plan Sponsor has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of termination, the Plan provides that all affected participants’ interests will become fully vested and nonforfeitable.
| (6) | Tax Status of Plan |
The Internal Revenue Service (IRS) has determined and informed the Plan Sponsor by a letter dated July 23, 2012, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Plan has been amended since receipt of such letter; however, the Plan’s management believes that the Plan remains in compliance with the applicable requirements of the IRC. Management is unaware of any course of action or series of events that have occurred that might adversely affect the Plan’s qualified status.
| 9 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (6) | Tax Status of Plan (continued) |
Accounting principles generally accepted in the United States of America require plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the Plan has taken an uncertain position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The plan administrator has analyzed the tax positions taken by the Plan, and has concluded that as of December 31, 2013, there are no uncertain positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is subject to routine audits by taxing jurisdictions; however, there are currently no audits for any tax periods in progress. The plan administrator believes it is no longer subject to income tax examinations for years prior to December 31, 2010.
| (7) | Related Party Transactions |
Certain plan investments are shares of First Horizon National Corporation common stock and mutual funds and common collective trust funds managed by Wilmington Trust Company. First Horizon National Corporation is the Plan sponsor and Wilmington Trust Company is the trustee and custodian and, therefore, these transactions qualify as party-in-interest transactions. Additionally, through the self-directed brokerage window, funds are held in short term investments managed by AonHewitt. Since AonHewitt is the recordkeeper of the plan, such transactions also qualify as party-in-interest transactions.
The Company also provides the Plan with certain management and administrative services for which no fees are charged.
| (8) | Investments |
The following presents investments that represent 5 percent or more of the Plan’s net assets at December 31, 2013 and 2012:
| 2013 | 2012 | |||||||
| First Horizon National Corporation – common stock | $ | 113,183,745 | $ | 103,828,076 | ||||
| Blackrock S&P 500 Index Fund | 55,832,693 | 44,896,052 | ||||||
| Royce Premier Fund | 44,342,024 | 40,615,402 | ||||||
| Dodge & Cox Balanced Fund | 39,027,740 | 29,881,365 | ||||||
| Thornburg Int’l Value Fund – R5 | 27,179,535 | 25,951,509 | ||||||
| Invesco Stable Value Fund | 25,724,261 | 25,761,922 | ||||||
| Goldman Sachs Financial Square – money market fund | 21,128,211 | 20,918,449 | ||||||
| 10 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (8) | Investments (continued) |
For the year ended December 31, 2013, the Plan’s investments, including gains and losses on investments bought and sold as well as held during the year, appreciated in value by $ 60,274,086, as follows:
| 2013 | ||||
| First Horizon National Corporation - common stock fund | $ | 17,437,883 | ||
| Common stock | 398,307 | |||
| Common/collective trust funds | 18,447,790 | |||
| Mutual funds/money market funds | 23,767,602 | |||
| Partnerships/joint venture | 29,125 | |||
| Segregated participant investments | 193,379 | |||
| $ | 60,274,086 | |||
| (9) | Fully Benefit Responsive Investments |
The Plan invests in the Invesco Stable Value Trust which is a collective trust fund in the Institutional Retirement Trust. The Trust’s primary investment objectives are to provide preservation of principal, maintain a stable interest rate, and provide daily liquidity at contract value for participant withdrawals and transfers. The Trust holds synthetic guaranteed investment contracts (GIC’s). The GIC’s are portfolios of securities owned by the Trust with wrap contracts associated with the portfolios. The fair value of wrap contracts is determined by Invesco National Trust Company based on issuer ratings determined by reference to credit ratings published by ratings agencies and on the change in the present value of the contract’s replacement cost. The contract value is generally equal to the principal amounts invested in the underlying investments, plus interest accrued at a crediting rate established under the contract, less any adjustment for withdrawals.
The crediting rate on the wrap contracts is accrued daily under the trust’s wrap agreements and is the product of the contract value of the wrap agreements multiplied by the crediting rate as determined pursuant to the wrap agreement. The wrapper contract provides that the adjustments to the interest crediting rate will not result in an interest crediting rate that is less than zero. Wrapper contracts’ interest crediting rates are typically reset on a monthly or quarterly basis according to each contract.
In certain circumstances, the amount withdrawn from the wrapper contract would be payable at fair value rather than at contract value. These events include termination of the Plan, a material adverse change to the provisions of the Plan, the employer elects to withdraw from a wrapper contract in order to switch to a different investment provider, or if the terms of a successor plan do not meet the wrapper contract issuer’s underwriting criteria for issuance of a clone wrapper contract. Management of the trust believes it is not probable that such events would be of sufficient magnitude to limit the ability of the trust to transact at contract value with the participants in the trust.
| 11 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (9) | Fully Benefit Responsive Investments (continued) |
The average yield of the stable value fund was 1.256% for 2013 and 0.884% for 2012 and the crediting interest rate was 1.449% for 2013 and 1.816% for 2012.
| (10) | Fair Value Measurements |
ASC 820, Fair Value Measurements and Disclosures, establishes a framework for measuring fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described as follows:
| Level 1 | Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the plan has the ability to access. | |
| Level 2 | Inputs to the valuation methodology include: | |
| · | quoted prices for similar assets or liabilities in active markets; | |
| · | quoted prices for identical or similar assets or liabilities in inactive markets; | |
| · | inputs other than quoted prices that are observable for the asset or liability; | |
| · | inputs that are derived principally from or corroborated by observable market data by correlation or other means. | |
| If the asset or liability has a specified (contractual) term, the level 2 input must be observable for substantially the full term of the asset or liability. | ||
| Level 3 | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. | |
The asset or liability’s fair value measurement level within the fair value hierarchy is based upon the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2013:
| 12 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (10) | Fair Value Measurements (continued) |
| Investments at Fair Value as of December 31, 2013 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Mutual funds | ||||||||||||||||
| Balanced Fund | $ | 39,027,740 | $ | — | $ | — | $ | 39,027,740 | ||||||||
| Large Cap Funds | 17,914,897 | — | — | 17,914,897 | ||||||||||||
| Small Cap Funds | 44,342,024 | — | — | 44,342,024 | ||||||||||||
| Fixed Income Funds | 13,064,047 | — | — | 13,064,047 | ||||||||||||
| International Funds | 27,179,535 | — | — | 27,179,535 | ||||||||||||
| Growth Funds | 13,245,978 | — | — | 13,245,978 | ||||||||||||
| Total mutual funds | 154,774,221 | — | — | 154,774,221 | ||||||||||||
| Common stocks | ||||||||||||||||
| Banking/financial services | 113,183,745 | — | — | 113,183,745 | ||||||||||||
| Other | 1,224,553 | — | — | 1,224,553 | ||||||||||||
| Total common stocks | 114,408,298 | — | — | 114,408,298 | ||||||||||||
| Money market funds | 22,522,403 | — | — | 22,522,403 | ||||||||||||
| Common/collective trust funds | ||||||||||||||||
| Index Funds | — | 95,169,707 | — | 95,169,707 | ||||||||||||
| Stable Value Funds | — | 25,724,261 | — | 25,724,261 | ||||||||||||
| Total common/collective trust funds | — | 120,893,968 | — | 120,893,968 | ||||||||||||
| Self directed brokerage window | ||||||||||||||||
| Short-term investments | 1,802,658 | — | — | 1,802,658 | ||||||||||||
| Common stock | 2,866,490 | — | — | 2,866,490 | ||||||||||||
| Mutual funds | 2,777,047 | — | — | 2,777,047 | ||||||||||||
| Partnerships | 82,511 | — | — | 82,511 | ||||||||||||
| Total self directed brokerage window | 7,528,706 | — | — | 7,528,706 | ||||||||||||
| $ | 299,233,628 | $ | 120,893,968 | $ | — | $ | 420,127,596 | |||||||||
| 13 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (10) | Fair Value Measurements (continued) |
The following table sets forth by level, within the fair value hierarchy, the Plan’s investments at fair value as of December 31, 2012:
| Investments at Fair Value as of December 31, 2012 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Mutual funds | ||||||||||||||||
| Balanced Fund | $ | 29,881,365 | $ | — | $ | — | $ | 29,881,365 | ||||||||
| Large Cap Funds | 11,208,189 | — | — | 11,208,189 | ||||||||||||
| Small Cap Funds | 40,615,402 | — | — | 40,615,402 | ||||||||||||
| Fixed Income Funds | 16,071,700 | — | — | 16,071,700 | ||||||||||||
| International Funds | 25,951,509 | — | — | 25,951,509 | ||||||||||||
| Growth Funds | 7,359,743 | — | — | 7,359,743 | ||||||||||||
| Total mutual funds | 131,087,908 | — | — | 131,087,908 | ||||||||||||
| Common stocks | ||||||||||||||||
| Banking/financial services | 103,828,076 | — | — | 103,828,076 | ||||||||||||
| Other | 1,118,237 | — | — | 1,118,237 | ||||||||||||
| Total common stocks | 104,946,313 | — | — | 104,946,313 | ||||||||||||
| Money market funds | 22,957,002 | — | — | 22,957,002 | ||||||||||||
| Common/collective trust funds | ||||||||||||||||
| Index Funds | — | 71,057,718 | — | 71,057,718 | ||||||||||||
| Stable Value Funds | — | 25,761,922 | — | 25,761,922 | ||||||||||||
| Total common/collective trust funds | — | 96,819,640 | — | 96,819,640 | ||||||||||||
| Self directed brokerage window | ||||||||||||||||
| Short-term investments | 1,410,852 | — | — | 1,410,852 | ||||||||||||
| Common stock | 2,198,566 | — | — | 2,198,566 | ||||||||||||
| Mutual funds | 2,142,866 | — | — | 2,142,866 | ||||||||||||
| Partnerships | 159,829 | — | — | 159,829 | ||||||||||||
| Total self directed brokerage window | 5,912,113 | — | — | 5,912,113 | ||||||||||||
| $ | 264,903,336 | $ | 96,819,640 | $ | — | $ | 361,722,976 | |||||||||
| (11) | Benefits Payable |
Included in net assets available for benefits are amounts allocated to individuals who have elected to withdraw from the Plan, but have not been paid as of December 31, 2013 or 2012. Plan assets allocated to these participants were $620,819 for 2013 and $624,835 for 2012.
| 14 |
First horizon National corporation savings plan
Notes to Financial Statements
December 31, 2013 and 2012
| (12) | Other Income Relating to Special Settlement |
In 2013, the Plan received a special contribution of $3.9 million related to a litigation settlement. The settlement payment was allocated to eligible participants’ accounts, for participants that were in the plan during the time period that the suit covered.
| (13) | Reconciliation of Financial Statements to Form 5500 |
The following is a reconciliation of net assets available for benefits per the financial statements to the Form 5500 expected to be filed for 2013:
| 2013 | 2012 | |||||||
| Net assets available for benefits per the financial statements | $ | 428,384,036 | $ | 369,180,332 | ||||
| Less: Benefit payable | (620,819 | ) | (624,835 | ) | ||||
| Add: Adjustment to contract value | 328,006 | 1,035,704 | ||||||
| Net assets available for benefits per the Form 5500 | $ | 428,091,223 | $ | 369,591,201 | ||||
The following is a reconciliation of benefits paid to participants per the financial statements to the Form 5500 expected to be filed for 2013:
| 2013 | ||||
| Benefits paid to participants per the financial statements | $ | 45,414,336 | ||
| Less: accrual for prior year | (624,835 | ) | ||
| Add: accrual for current year | 620,819 | |||
| Benefits paid to participants per the Form 5500 | $ | 45,410,320 | ||
The following is a reconciliation of the total increase (decrease) in net assets of the plan per the financial statements to the Form 5500 expected to be filed for 2013:
| 2013 | ||||
| Total increase in assets per the financial statements | $ | 59,203,704 | ||
| Cumulative adjustment to contract value | (707,698 | ) | ||
| Cumulative benefits payable | 4,016 | |||
| Net income (loss) per the Form 5500 | $ | 58,500,022 | ||
| (14) | Subsequent Events Evaluation |
Effective January 1, 2014, automatic savings plan enrollment deferrals for new hires, rehires, and newly eligible enrollees increased from 1% to 3%.
The Plan has evaluated subsequent events through the date that the financial statements were filed with the Securities and Exchange Commission.
| 15 |
FIRST HORIZON NATIONAL CORPORATION SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
Plan Number: 002
EIN: 62-0803242
December 31, 2013
| (a) | (b) | (c) | (e) | |||||
| Identity of issue, borrower, lessor, or similar party | Description of investment including maturity date, rate of interest, collateral, par, or maturity value | Current value | ||||||
| * | Wilmington Prime Money Market Fund W Class | Money market fund | $ | 1,241,814 | ||||
| Goldman Sachs Financial Square Government | Money market fund | 21,128,211 | ||||||
| Total money market funds | 22,370,025 | |||||||
| * | First Horizon Self Directed Brokerage Account | Self-Directed Brokerage Account | 7,528,706 | |||||
| Invesco Stable Value Fund | Common/collective - stable value fund | 25,724,261 | ||||||
| Barclays Global Life Path Index 2015 Fund | Common/collective trust fund | 2,776,792 | ||||||
| Barclays Global Life Path Index 2020 Fund | Common/collective trust fund | 5,224,429 | ||||||
| Barclays Global Life Path Index 2025 Fund | Common/collective trust fund | 6,907,993 | ||||||
| Barclays Global Life Path Index 2030 Fund | Common/collective trust fund | 3,856,426 | ||||||
| Barclays Global Life Path Index 2035 Fund | Common/collective trust fund | 2,510,510 | ||||||
| Barclays Global Life Path Index 2040 Fund | Common/collective trust fund | 2,545,483 | ||||||
| Barclays Global Life Path Index 2045 Fund | Common/collective trust fund | 3,185,694 | ||||||
| Barclays Global Life Path Index Retirement | Common/collective trust fund | 2,839,422 | ||||||
| Blackrock Aggregate Bond Index Fund | Common/collective trust fund | 2,397,402 | ||||||
| Blackrock MSCI ACWI EX US Fund | Common/collective trust fund | 2,676,351 | ||||||
| Blackrock Russell 2000 Index Fund | Common/collective trust fund | 4,416,512 | ||||||
| Blackrock S&P 500 Index Fund | Common/collective trust fund | 55,832,693 | ||||||
| Total common/collective trust funds | 95,169,707 | |||||||
| Dodge & Cox Balanced Fund | Mutual fund | 39,027,740 | ||||||
| T Rowe Price Institution Large Cap Value Fd | Mutual fund | 11,646,687 | ||||||
| Mainstay Large Cap Growth Fund | Mutual fund | 6,268,210 | ||||||
| Royce Premier Fund | Mutual fund | 44,342,024 | ||||||
| Goldman Sachs Core Fixed Income | Mutual fund | 13,064,047 | ||||||
| Lord Abbett Developing Growth Fund Inc | Mutual fund | 13,245,978 | ||||||
| Thornburg Intl Value Fund-R5 | Mutual fund | 27,179,535 | ||||||
| Total mutual funds | 154,774,221 | |||||||
| * | First Horizon National Corporation | First Horizon National Corporation common stock fund, 10,572,008.6606 units | 113,183,745 | |||||
| * | Participant Loans | Loan fund, interest rates ranging from 3.25% to 8.25%, collateralized by participants’ right, title and interest in and to the Plan | 8,091,371 | |||||
| Segregated participant investments: | ||||||||
| Fidelity Inst’l Govt Portfolio | Money market fund | 152,378 | ||||||
| Exxon Mobil Corporation | Corporate stock, 9,869 shares | 998,743 | ||||||
| Murphy Oil Corporation | Corporate stock, 3,000 shares | 194,640 | ||||||
| Murphy USA Inc | Corporate stock, 750 shares | 31,170 | ||||||
| Total corporate stock | 1,224,553 | |||||||
| $ | 428,218,967 | |||||||
| * | Indicates party-in-interest to the Plan. For First Horizon Self Directed Brokerage Account, this includes $1.8 million of short-term investments managed by Aon Hewitt, a related party. |
See accompanying report of independent registered public accounting firm.
| 16 |
EXHIBITS
The following documents are filed as exhibits to this Form 11-K:
| 1. | Consent of Independent Registered Public Accounting Firm [Mayer Hoffman McCann P.C.]. |
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the Pension, Savings and Flexible Plan Committee of the First Horizon National Corporation Savings Plan (“Plan”) has duly caused this annual report to be signed on behalf of the Plan by the undersigned hereunto duly authorized.
| FIRST HORIZON NATIONAL CORPORATION | |||
| SAVINGS PLAN | |||
| Date: June 25, 2014 | By: | /s/ Tanya L. Hart | |
| Tanya L. Hart | |||
| Senior Vice President – Executive Compensation Manager, and Member of the Pension, Savings and Flexible Compensation Committee | |||
EXHIBIT INDEX
| No. | Description | ||
| 23.1 | Consent of Independent Registered Public Accounting Firm | ||
| [Mayer Hoffman McCann P.C.] | |||